Sun shines on Honda, Ford, Merc

Has the turnaround begun? In what could bring some relief to the Indian automobile industry battling a prolonged slowdown in Asia’s third largest economy, industry majors like German luxury carmaker Mercedes-Benz, Honda Cars and Ford reported considerable sales gains for March.

But it turned out to be a mixed bag. Maruti Suzuki, India’s largest carmaker by sales, Korean carmaker Hyundai, second biggest in the country by sales, M&M, India’s largest utility vehicles maker, Tata Motors, the biggest automaker by volumes, and Toyota Kirloskar Motor continued to report drop in sales with buyers shying away from new purchases despite an excise tax cut of 4 to 6 per cent in mid-February.

Sales at Mercedes-Benz soared 27 per cent to 2,554 premium cars in the first quarter of 2014 from 2,009 units sold in the same period last year.

“Our success and robust growth of 27 per cent in the first quarter of 2014 amidst challenging market dynamics is a clear indicator that demand for the new S-Class, ML-Class and GL-Class is growing and they are all currently wait-listed, even after producing them locally,” Eberhard Kern, managing director and CEO at Mercedes-Benz India, said.

Mercedes-Benz sold 9,003 cars in 2013, a growth of 32 per cent over the previous year. Its German archrivals Audi and BMW did not release sales data on Tuesday.

Honda Cars India reported 83.4 per cent growth in domestic sales at 18,426 units in March compared with 10,044 units sold in the same month last year.

The Japanese auto major’s sales were driven primarily by the new version of its premium City sedan. The 2014 City diesel variant has been one of the best performing models for Honda.

During March, the company sold 1,456 units of its small car Brio, 7,374 units of sedan Amaze and 9,518 units of City. Besides, the company sold 78 units of sports utility vehicle CRV. The firm exported 587 units during the month.

Honda also posted highest-ever annual sales of 1,34,339 units for 2013–14, recording 83 per cent growth over last financial year. It had sold 73,483 units during FY13.

“We received overwhelming response for Amaze and the all new City during the last financial year. The year also saw our entry into the diesel segment with i-DTEC diesel engine technology, which has received overwhelming response,” Jnaneswar Sen, senior vice-president for marketing and sales at Honda Cars India, said.

He said two new models — the stylish mid-sized MPV Honda Mobilio and the all-new Honda Jazz — are due for launch this financial year. “We look forward to another year of growth,” Sen said.

At Ford India sales grew 57 per cent to 11,805 units in combined domestic sales and exports in March from 7,499 units in the year-ago period. The American firm’s domestic sales rose 21 per cent to 6,356 units in March, up from 5,271 units in the corresponding period last year.

“The excise duty reduction has definitely been a positive step. As India gets set to vote, we look forward to industry-friendly initiatives being sustained to support the important automotive sector,” Vinay Piparsania, executive director of marketing, sales and service at Ford India, said.

Ford India’s sales for FY14 rose 9.40 per cent to 84,469 units from 77,225 units last year. Domestic sales and exports for the FY14 rose 24 per cent to 132,540 vehicles from 106,541.

Maruti Suzuki reported a 5.5 per cent drop in total sales in March at 1,13,350 units against 1,19,937 units in the same month last year. Exports fell 8 per cent to 11,081 units in March from 12,047 units in the same month last year.

The company said domestic sales declined by 5.2 per cent during the month to 1,02,269 units from 1,07,890 units a year ago. Maruti’s total sales for FY14 rose by 3.4 per cent to 8,90,455 units from 8,61,337 units.

Cumulative domestic and export sales at Hyundai Motor India declined 8.4 per cent to 51,708 cars in March from 56,437 units last year. Domestic sales increased marginally at 3.4 per cent to 35,003 units from 33,885 units in the same period last year.

“Post the excise duty reduction and a strong performance in the compact segment, Hyundai registered March sales of 35,003 units with 3.4 per cent a growth over the corresponding month indicating a positive momentum,” Rakesh Srivastava, senior vice-president for sales and marketing at Hyundai Motor India, said.

At Mahindra and Mahindra, sales of passenger vehicles fell 9 per cent to 23,433 units in March, from 25,847 units in the year-ago month. The firm ended FY14 with 18 per cent drop in sales at 2,29,155 units from 2,79,270 sold last year.

“After the reduction in excise duty across segments, the auto industry has seen the level of inquiries go up, but has not witnessed any major surge in sales,” Pravin Shah, chief executive for automotive division at Mahindra & Mahindra, said.

He expects sentiments to improve after the national elections, leading to an increase in demand. “We continue to be optimistic for the future and expect a growth momentum during FY15,” Shah said.

Tata Motors’ total sales, including exports, in the month under review fell by 29.60 per cent to 51,184 units from 72,712 units in the year-ago month. Domestic sales of commercial and passenger vehicles too declined. The offtake fell by 33.49 per cent to 45,996 units from 69,160 units in March 2013.

For year ended March 31, the company's sales fell by 30.04 per cent to 566,695 units from 810,086 shipped out in the same month of 2013.

Sales at Toyota Kirloskar Motor, which had declared a lockout at its two manufacturing facilities near Bangalore and suffered heavy production losses, fell 58 per cent to 8,206 units in March from 19,452 units. The company exported 954 units of the Etios series last month.

“We started limited operations from March 18, with the help of our non-unionised team members, majority of whom are supervisors,” N Raja, senior vice–president, sales and marketing at Toyota Kirloskar Motor, said.

“Growth in passenger vehicle (PV) sales continued to remain sluggish last month despite heavy discounts, which are higher by around 20 to 30 per cent compared with that in March 2013,” Subrata Ray, senior auto analyst at Icra, told Financial Chronicle.

He said even the excise duty cut implemented in mid-February that brought down car prices by 3.5-5 per cent (over and above discounts) failed to enthuse car buyers.

“Still, we expect demand to see an uptick in the next few months given that (a) the excise duty sop is applicable only till June 30, which could lead to sales advancement to some degree; (b) around 40 per cent of the industry’s sales are attributable to replacement demand, a segment of buyers that may choose to avoid postponement of their purchase decisions further to capitalise on the currently available window of reduced PV prices,” Ray said.

Among the two-wheeler makers TVS Motor closed March with a 17 per cent increase in sales over the corresponding period last year. It sold 196,826 units last month, up from 167,583 units sold in March 2013. Hero MotoCorp’s March sales grew by 11.9 per cent to 524,028 units. For the year ended March 31, the company’s sales grew three per cent to 6,245,895 units from 6,075,583 units sold in 2012-13.